Why is the global cost of living increasing right now?

The global cost of living is rising because the world’s money supply grew faster than the stuff we can buy, and many things took a long time to get back to normal after recent disruptions.

Imagine you have 10 apples in your basket and 10 coins. If everyone suddenly gets 5 more coins but still only has those same 10 apples, each apple becomes more expensive because there is more money chasing the same number of items. This is exactly what happened globally with inflation. During the pandemic, governments printed extra cash to help people, acting like a big gift card for the whole world.

Even after the worst parts of the pandemic ended, prices did not just drop back down. Think about a toy store where the price of LEGO sets went up because shipping ships got stuck. When the ships finally moved, the factories had already used more expensive plastic and paid workers higher wages to keep them happy. Those new costs became permanent, like a new "membership fee" for making things.

Also, energy plays a huge role. Oil is like the juice that powers almost everything we use, from driving cars to heating homes. When wars or supply issues happen in oil-rich countries, the price of that juice goes up. This makes groceries more expensive because trucks need fuel to deliver them, and farmers need it to grow crops. So, even if you do not buy gas, the cost of your bread went up because the baker’s delivery truck did.

When people get used to higher prices, they stop expecting discounts. Stores see this as a sign that they can keep prices high. It is like when your allowance goes up by five dollars; you start buying bigger cookies without feeling the pinch. Since everyone has more cash than before and stores know we are willing to pay, the cost of living stays elevated, keeping our daily expenses higher until wages catch up with the new reality.